Union Budget 2022: MSMEs upset with eligibility criteria of credit guarantee scheme

The economic survey revealed that out of Rs 4.5 lakh crore allocated for ECLGS, only 66% could be utilised

Micro, small and medium enterprises (MSME) lamented over the eligibility criteria of the expanded Emergency Credit Line Guarantee Scheme (ECLGS) on Tuesday, highlighting that they will be a hindrance to the exhaustion of the fund.

Nirmala Sitharaman’s fourth Budget expanded the ECLGS guarantee cover by Rs 50,000 crore to a total amount of Rs 5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.

“They have expanded the industries for the scheme, had they given a top-up of another 10% to the already suffering sectors like manufacturing, more amount could have been availed,” said R Ramamurthy, spokesperson, All India Council of Association of MSMEs (AIMA).

The economic survey presented on Monday revealed that out of Rs 4.5 lakh crore allocated for ECLGS, only 66% could be utilised.

“A separate guideline for eligibility criteria to avail ECLGS scheme could have been formulated”, said a Karnataka Small Scale Industries Association (KASSIA) spokesperson.

K E Raghunathan, Convenor, Consortium of Indian Associations believes that the ECLGS scheme has been made as a scapegoat. “What is required is modification in eligibility criteria. Sad there is no announcement to offer specific packages for sectors affected”.

The industry is also unhappy with nothing being done to mitigate the menace of inflated input costs. “High cost of raw materials is impacting businesses of MSMEs, we were expecting import duties to be reduced for certain items,” said Ramamurthy.

However, the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme has been announced facilitating additional credit of Rs 2 lakh crore for Micro and Small Enterprises.

Watch latest videos by DH here: